After going to the trouble last fall of picking a new Medicare Advantage health plan, Wendy Sandstrom is dismayed she must do so again this year just to keep seeing her same doctors.

The 69-year-old St. Louis Park resident is confronting a hassle all seniors in Medicare Advantage could face if their health care providers and insurers can't agree on a network contract.

"It's incredibly annoying," she said of having to switch plans. "It's either change insurance or go to a different clinic and hospital — and I'm not going to do that. I've been going to Park Nicollet since I was in fifth grade."

An estimated 59,000 Minnesotans in the coming weeks are facing this decision about their health insurance networks as Medicare open enrollment for 2025 begins Tuesday.

The state is seeing a surge in potential disruptions to insurer-provider networks for the coming year, with patient consequences ranging from higher costs to health systems no longer granting appointments.

"It really is a profound effect from the enrollee perspective," said Paul Ginsburg, an economist and health policy professor at the University of Southern California. "Now, all of a sudden, if their Medicare Advantage plan does not include a major provider that's the one they use, this would certainly get their attention."

It's hard to predict exactly how many will make changes because studies have shown that seniors rarely switch coverage during open enrollment, Ginsburg said. Some might not realize their network is changing, he said, and will be disappointed or upset to find their doctors next year aren't included.

Park Nicollet, where Sandstrom's doctors work, is owned by HealthPartners, the Bloomington-based operator of hospitals and clinics that announced in July it would move out-of-network next year with the UnitedHealthcare Medicare Advantage plan. Sandstrom changed to a UnitedHealthcare plan for 2024, and now she'll have to change again to keep her doctors in-network in 2025.

Since the HealthPartners announcement, four other health systems with operations in Minnesota have said they'll also go out-of-network next year with certain Medicare Advantage plans.

Duluth-based Essentia Health is dropping from Medicare networks at both Minnetonka-based UnitedHealthcare and Kentucky-based Humana. Three other systems — Avera Health, North Memorial Health and Sanford Health — say they're going out-of-network with Humana, with patients facing higher out-of-pocket costs next year as a result.

Other changes are also highlighting networks — not because health systems are newly dropping out, but because they've decided to stop scheduling patients in Medicare Advantage plans that haven't negotiated network contracts.

Mayo Clinic said about a week ago that nearly 600 Minnesotans will need to drop certain Medicare Advantage plans if they want to keep getting care in Rochester. Minneapolis-based M Health Fairview confirmed to the Minnesota Star Tribune that it won't provide appointments next year for more than 2,900 patients in Medicare Advantage plans from Connecticut-based Aetna.

Medicare is a government health insurance program for U.S. seniors and younger people with disabilities that covers hospitalization and doctor visits. Since Medicare doesn't cover all costs, many seniors buy a Medicare Supplement from a private insurer to expand the coverage, plus a separate policy from an insurer for prescription drugs.

A popular alternative is the Medicare Advantage plan, which is sold by a private insurer hired by Medicare to provide for members' care along with their medications, in most cases. These health plans often have lower premiums compared with the upfront costs of a Medicare Supplement plus drug coverage. But Medicare Advantage plans generally have fewer providers in their networks — and networks can change.

Medicare counselors at the state's Senior LinkAge Line say they haven't seen another open enrollment period where so many health care providers are dropping out of Medicare Advantage networks, according to Kelli Jo Greiner, the Medicare product manager and policy analyst with the Minnesota Board on Aging.

It's particularly frustrating for seniors because there's always a chance health systems and health insurers will come to a last-minute agreement to keep doctors and hospitals in-network, she said. Those who want to stick with their health care providers shouldn't wait to make changes, she said, but do their homework and switch during Medicare's annual election period starting Oct. 15.

"What happens is, if people wait, they get down to the wire, and sometimes they can't get the assistance ... to actually enroll before the deadline of Dec. 7," Greiner said.

If health insurers and health care providers reach a deal after Dec. 7 for staying in-network next year, seniors who switched plans can return to their previous Medicare Advantage insurer during a second open enrollment period between Jan. 1, 2025, and March 31, 2025.

"They do have that opportunity," Greiner said.

Labor costs, revenue squeeze

So far this year, the online publication Becker's Healthcare has tallied 27 disputes between health care providers and Medicare Advantage (MA) insurers, compared to 15 tracked the previous year.

Comprehensive national data on payer-provider disputes aren't available. George Hill, a managing director at Deutsche Bank, said a national surge in network dropouts he was forecasting earlier this year hasn't materialized, which makes Minnesota look like an outlier. The big story across the country, he said, is how some Medicare Advantage insurers are pulling back.

"It's been increasingly hard for the plans to make money and be profitable," Hill said in an interview. "You've started to see plans exit areas where they didn't feel they could make a sufficient return."

It's tough to know all the issues in any particular contract dispute between a health insurer and health care provider, since negotiations are private, but analysts cite a variety of broad economic factors likely in the mix.

Medicare Advantage has been a very profitable business for health insurers, but carriers coming out of the pandemic underestimated how much health care seniors would use, said Jared Holz, an analyst with Mizuho Securities America. That's made the business more difficult, said Hill, who also noted that a change to the federal government's system for making risk adjustment payments is denting health insurer revenue.

Health systems, meanwhile, seem to have lost patience with claims denials, payment delays and prior authorization rules from insurers at a time when they've been squeezed by the pandemic, Ginsburg said.

"They're saying: 'We're having trouble hiring all the nurses we need. Maybe we could do without some of these Medicare Advantage patients, because of all the insurance hassles,'" Ginsburg said. "It's a major change in the Medicare Advantage market."

Debate on denials

Power dynamics in local health care markets also are a factor, said Cheryl Damberg, a health economist with California-based Rand Corp.

Health systems faced with rising labor costs might be willing to drop from a health plan's network if they can't win payment rates to bolster thin operating margins, Damberg said. Even at nonprofit providers like HealthPartners, thin margins can hinder their ability to raise money for needed capital improvements.

"What you are seeing is that the providers are not universally exiting Medicare Advantage, but picking on selected plans in their markets in what you might say are 'test cases' to push for higher payments," Damberg said in an e-mail. "They figure out where their leverage is."

HealthPartners and other health systems operating in Minnesota say they're dropping out of certain Medicare Advantage plans that have been excessively denying claims and delaying payments. These administrative burdens undercut the value of the Medicare Advantage program, according to the Minnesota Hospital Association.

"Almost all of these programs now utilize prior authorization, and payer approvals and denials are consuming more and more of the capacity," the trade group said in a statement.

UnitedHealthcare and Humana have denied these allegations, arguing that health systems have been holding out for above-market service reimbursements. United, the nation's largest health insurer, said in a statement last week that it negotiates thousands of contracts with health care providers each year, the vast majority of which result in renewed agreements.

"As a result, our Medicare Advantage network nationally consists of more than 4,000 hospitals and over 1 million providers," the company said. "Unfortunately, a small number of health systems use our members and their patients as leverage during negotiations to obtain higher rates and to drive up health care costs for consumers."

'It's complicated'

As a retired nurse, Wendy Sandstrom is pretty good with health care lingo but finds it a chore to decipher insurance terms like "formulary," "deductible" and "co-insurance."

When she worked in schools and hospitals, Sandstrom appreciated how health plan options were winnowed by HR professionals, sometimes with the help of employee committees, so workers had a manageable set of choices for coverage.

It's a different story with Medicare. There are about 40 different Medicare Advantage plans being sold in Hennepin County, in addition to the Medicare Supplements and stand-alone prescription drug plans that seniors might buy if they stay with original Medicare.

"The choices — that's the problem," she said. "It's like they're infinite."

Considering the complexity, it's no wonder that many seniors don't shop each fall, Sandstrom said, or try shortcuts like looking solely at premium costs. Skipping the details, she says, can be costly.

"It's complicated and it's not straightforward," she said. "But then, if you don't look at the specifics of the plan, you're going to find out down the line that you'll pay a lot more."

Surveying Medicare Choices

Open enrollment runs Oct. 15 through Dec. 7. The Medicare Plan Finder tool is available online at Medicare.gov. The federal government assists consumers over the phone at 800-MEDICARE (800-633-4227). Health insurance agents can help individual seniors, as well. Minnesota seniors can get help exploring options by calling the state's Senior LinkAge Line at 800-333-2433.